Market climbing wall of optimism for possible peace deal

Briefing.com Summary:

*Oil price and bond yields are down on reports the U.S. and Iran could be close to an agreement on a peace plan.

*The S&P 500 is shooting for its ninth consecutive weekly gain.

*The AI trade has been energized by UBS increasing its price target for Micron in a big way.

The equity futures market is up nicely this morning, catalyzed once again by reports that the U.S. and Iran could be close to an agreement on a peace plan. Ironically, that report has been joined by an added report that the U.S. made “self-defense strikes” in southern Iran early Tuesday.

What we know is that oil prices are lower (WTI -3.8% to $92.89/bbl) and bond yields are lower (10-yr -7 bps to 4.49%) in front of today’s $69 billion 2-yr note auction. That is the market’s way of signaling that it is more optimistic about a possible deal than pessimistic about the “self-defense strikes” leading to a broader military response.

Currently, the S&P 500 futures are up 53 points and are trading 0.7% above fair value, the Nasdaq 100 futures are up 357 points and are trading 1.2% above fair value, and the Dow Jones Industrial Average futures are up 257 points and are trading 0.6% above fair value.

We have seen the equity market climb this wall of optimism so many times that it makes one wonder if an actual deal will be greeted with a sell-the-news response. In any case, there is no reason to doubt—not at this point—that a buy-the-dip response would be triggered by a sell-the-news response.

It is that kind of bull market, one that sees the good in the good and the good in the bad. That focus has been sharpened by the impressive earnings growth and the price action itself, which has yet to disappoint—or truly penalize, we should say—the buy-the-dip crowd.

There is no dip to buy coming off Friday’s session, however, which culminated with gains for the major indices and the eighth consecutive winning week for the S&P 500.

The market is going to be spotted with some early gains in this abbreviated week that will enable the S&P 500 to have a head start in its pursuit of a ninth consecutive winning week.

There isn’t any corporate news that is moving the needle this morning. There is an analyst action, however, that has helped fuel the bullish bias. UBS raised its price target for Micron (MU), citing the company’s ability to capitalize on the structural changes AI has driven to the entire memory complex.

Shares of MU are up 6.2% in pre-market trading, building on the 163% year-to-date gain registered coming into today. Related stocks are riding the coattails of this call, as the AI trade continues to drive the outperformance of the semiconductor stocks, mega-cap stocks, tech sector, and Nasdaq 100.

Their leadership will be on display when the opening bell rings.

—

Originally Posted May 26, 2026 – Market climbing wall of optimism for possible peace deal